May. 06, 2022
Dear SEC, I write to you as a GBTC shareholder and as a financial advisor, in support of the conversion of Grayscale Bitcoin Trust (OTCQX: GBTC) to an ETF. By not approving this conversion, you are not protecting me, the investor – the very person you were appointed to protect. Last October, you approved futures-backed Bitcoin ETFs it, but continue to reject applications for spot Bitcoin ETFs. You are fully aware of the complexities of futures based contracts and the frustration many investors have had with understanding why at times their asset does not track the spot price (contango & backwardation). It is not a pure way to reflect the true value of the underlying asset. We live in a country that prides itself on the freedom of choice, we should have the same choice to invest in a spot based product or a futures based product. We should also have the choice to invest in levered and or inverse products, you allow margin (more expensive) so why not levered ETFs (different issue from my comments around GBTC but I know you are looking to restrict retail investors options even further in that space as well). I will not invest nor support my firm approving a futures based ETF for client use. If it isn’t good enough for me it isn’t good enough for my clients. Furthermore, the discount to NAV in GBTC has been around 25%, on average for quite some time. This means that the price of GBTC is less than the price of Bitcoin, the asset itself. Given that GBTC has about $30bn in AUM, existing shareholders like me are experiencing a destruction of value of around $7.5 billion. GBTC is the world’s largest publicly-traded cryptocurrency fund, with hundreds of millions in daily trading volume. It holds approximately 3.4% of all Bitcoins outstanding, and is held by more than 850,000 investors, like me. Thank you for allowing me to express my concerns regarding freedom of choice and what I believe is ethically correct for GBTC’s investors. Look at the bright side of a spot ETF, it will attract folks who are otherwise investing directly into Bitcoin on crypto exchanges and holding in wallets you are not able to see. Best, Jason Mertz Jason A. Mertz | The BDM Group Managing Director Financial Advisor / Truist Investment Services, Inc. Investment Advisor Rep / Truist Advisory Services, Inc. Truist Wealth Private Client Group Kristin Thomas Business Development Officer Director of Client Experience | The BDM Group